This week, the Department of Labor took the last step before the final overtime rule is published and implemented. DOL sent the rule to the Office of Management and Budget, which reviews regulations and usually takes 30 to 90 days. The rulemaking process has been sped up for a reason.
According to the fall of 2015 semiannual regulatory agenda, the overtime rule was scheduled to be finalized in July 2016. But to avoid congressional rejection, the rule needs to be finalized by mid-May.
It is widely speculated that the rule is on the fast track to avoid a Congressional Review Act challenge that could hold up the rule until a new president takes office that may be willing to reject it.
The DOL’s proposed overtime rule would raise the minimum salary threshold for overtime-exempt employees from $23,660 to $50,440.
In a report, I outline the numerous problems with such a rise in the salary threshold. Most notably, flexible work arrangements will become rarer and many salaried employees may be demoted to hourly status. This will have a devastating impact on ambitious salaried employees’ career trajectories.
Today, members of the House and Senate introduced a bill to nullify the proposed overtime rule, called the Protecting Workplace Advancement and Opportunity Act.
- Nullifies the DOL’s proposed overtime rule;
- Requires the Secretary of Labor to conduct a thorough economic analysis that focuses on small businesses;
- Analyzes regional differences and cost-of-living differences;
- Crafts the rule to minimize impact on small employers; and
- Examines management and human resources costs to all employers, including payroll system changes, reclassifying employees, and additional time scheduling employees.
Unfortunately, the bill has no chance of passing prior to the implementation of the final overtime rule. The only way to stop the rule is through the appropriations process. However, if the last round of appropriations is any indication, there is little chance Republicans will use the appropriations process to stop the enforcement of irresponsible regulations that harm employment prospects and the economy.
It is unknown what the DOL’s final rule will look like, but with the haphazard and accelerated promulgation of the rule, it is highly unlikely the DOL took to heart the public comments that warn of the damage the rule could have on small businesses and workers across the nation.